Micron: A Powerful Rally That Might Need A Breather
When you think of the AI revolution, Micron Technology (MU) might not be the first name that comes to mind. But it belongs in the conversation.
Micron derives the majority of its revenue from its DRAM segment. Within that, high bandwidth memory products are among the fastest-growing products in the company’s lineup. It’s this line of business that has kept Micron growing throughout this cycle and has fueled a big rally in the stock off of the April lows.
source: StockCharts
Ever since the post-Liberation Day tariff pause, Micron (along with a number of other tech stocks) has rocketed higher, managing to double in value from its April low to its recent high. With volatility remaining subdued, the market has favored a risk-on sentiment that’s helped fuel a big rebound in growth stocks.
The MACD indicator1 has reflected that big momentum improvement. After picking up strength in April, momentum stalled in late May, but managed to find a second wind over the past few weeks. Even though this strength has been in place for two months, there still isn’t a clear sign that it’s slowing down yet, at least technically speaking.
The Chande Trend Meter2 recently hit its highest level since mid-2024, confirming the trend being signaled by the MACD. This is the area around where this indicator has peaked in the past, but there have also been periods in the past where it’s managed to stay at this level for a little while. That’s no indication of what could happen here, but it could suggest that a reversal might not be imminent.
The RSI3, however, is signaling strongly overbought conditions. Readings of 84, where the stock is currently sitting, are quite unusual and often get normalized over a period of time. Micron could benefit from a bit of a breather from its current rally, but it’s been a strong one thus far.
Overall, we feel that Micron has been able to take advantage of the renewed momentum for tech stocks over the past couple months. The stock, however, has moved awfully far, awfully fast and investors might not want to bank on a continuation of this indefinitely.
1According to Investopedia, the MACD (or moving average convergence/divergence) indicator is “a technical indicator to help investors identify price trends, measure trend momentum, and identify entry points for buying or selling.”
2According to ChartSchool, the Chande Trend Meter “assigns a numerical score to a stock or other security, based on several different technical indicators covering six different timeframes. Distilling all this technical information down into a single number provides an easy way to identify the strength of the trend for a given security.”
3According to Investopedia, the relative strength index (or RSI) “measures the speed and magnitude of a security's recent price changes to detect overbought or oversold conditions in the price of that security.”
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